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Profile & History

Profile

BM&FBOVESPA S.A. — Securities, Commodities & Futures Exchange is one of the largest exchanges in the world by market capitalization and the leader in Latin America.

As the main institution for the intermediation of transactions in the Brazilian capital markets, the company develops, implements and provides systems for the trading of equities and equity derivatives, financial derivatives, corporate and government bonds, agricultural commodities and spot foreign exchange.

Through its platforms it performs registration, clearing and settlement of the securities traded in its environments, as well as listing stocks and other assets. It also acts as the central depository for the assets traded in its markets and licenses software and indices.

BM&FBOVESPA also performs risk control and management on a beneficial owner basis and has a robust Clearinghouse structure that assures the efficient and secure functioning of its markets.

BM&FBOVESPA is the only securities, commodities and futures exchange in operation in Brazil. It actively promotes the capital markets through innovation and product development and education programs for the population. It also manages social investments focusing on the development of communities that relate to its universe.

Created in 2008 with the integration between BM&F and BOVESPA, BM&FBOVESPA is a public company and trades under the ticker symbol BVMF3 on the Novo Mercado special listing segment for companies committed to best practice in corporate governance. It is also part of the Ibovespa, IBrX-50, IBrX and ITAG indices, among others.

With headquarters in the city of São Paulo, BM&FBOVESPA has representative offices in New York, London and Shanghai to support participants in activities with local customers and relations with regulators, and to disseminate its products and governance practices to potential investors.

History

BM&FBOVESPA was founded in May 2008 with the integration between BM&F, Brazil’s main derivatives exchange, and BOVESPA, the stock exchange. It is now the only securities exchange in Brazil. It is also the provider of central counterparty and securities custody services. In addition, BM&FBOVESPA ranks among the world’s leading exchanges by market capitalization and second in the Americas (August 2012).

The history of BM&FBOVESPA and of the Brazilian exchange industry have been closely linked from the very beginning.

To find out more, read the sections below.
 

 
BM&F

BM&F was established in January 1986. During the 1990s it strengthened its position in the domestic market and became the Latin American hub for derivatives trading.

With the aim of providing an integrated set of services, in 2002 BM&F acquired a majority holding in the equity of the Rio de Janeiro Stock Exchange and coordinated the incorporation of Bolsa Brasileira de Mercadorias, the Brazilian Commodities Exchange. In the same year it completed important reforms deriving from implementation of the new Brazilian Payment System and established a Foreign Exchange Clearinghouse. In 2004 it expanded its strategic activities by establishing a Securities Clearinghouse and BM&F Settlement Bank.

In 2007 BM&F began demutualizing and preparing an IPO.

In October 2007 it signed a partnership agreement with CME Group whereby the two companies invested in each other’s equity and interconnected their electronic networks to route orders for products traded in both the derivatives and equity segments.

On November 30, 2007, BM&F stock began trading on BOVESPA’s Novo Mercado premium listing segment under the ticker symbol BMEF3.

 
BOVESPA

BOVESPA’s history dates back to 1890, when the Free Exchange (Bolsa Livre) was established. In the 1960s BOVESPA became a non-profit mutualized stock exchange and remained so until demutualization in 2007. With the advent of a new regulatory framework for the Brazilian capital markets in the 1960s, the company’s name was changed from BOVESPA to Bolsa de Valores de São Paulo, the São Paulo Stock Exchange.

Another milestone was the implementation of Ibovespa, the BOVESPA Index, established in 1968 to serve as an average indicator of the stock market’s behavior. This index has been calculated uninterruptedly ever since, without any methodological changes.
In the early 1970s the registration of transactions performed on the floor of the exchange was automated, and the dissemination of stock prices and other market information became electronic and immediate. At the end of that decade the exchange pioneered the introduction of equity options in the Brazilian marketplace.

In the 1980s two factors were fundamental to BOVESPA’s development: the creation of mutual funds (equities and pensions) and the advent of stock certificate dematerialization. Book-entry custody and transfer gradually became predominant, speeding up the process of settlement and increasing market liquidity.

At the start of the 1990s BOVESPA introduced an electronic equity trading system called CATS (short for Computer Assisted Trading System), without deactivating the traditional open outcry system. CATS was developed by the Toronto Stock Exchange. In the mid-1990s it was replaced by a more advanced system acquired from the then Paris Stock Exchange (now NYSE Euronext). At the same time Companhia Brasileira de Liquidação e Custódia (CBLC) was established to operate as a Clearinghouse and central depository, enabling banks to act as clearing agents.

In 2000 BOVESPA led a program of integration with the eight other Brazilian exchanges to concentrate all equity trading in a single environment. In this way BOVESPA became the only stock exchange in the country and was used for trading in equities by brokerage houses all over Brazil. In this integration process, through CBLC BOVESPA acquired Companhia de Liquidação e Custódia (CLC), which was then responsible for clearing and settling securities trades on the Rio de Janeiro Stock Exchange.

In that same year BOVESPA launched three special listing segments for companies with high standards of corporate governance: Novo Mercado, and Corporate Governance Levels 1 and 2, and in 2001 BOVESPA created BOVESPAFIX, an electronic trading platform specifically for corporate bonds. In 2002, with the acquisition of SOMA, it also began operating as Brazil’s only organized market for over-the-counter (OTC) equity trading. In September 2005 BOVESPA ended open outcry trading and became a totally electronic market.

On August 28, 2007, BOVESPA’s demutualization was approved. Members of BOVESPA and shareholders in CBLC became shareholders in BOVESPA Holding. In October 2007, BOVESPA Holding began trading on Novo Mercado under the ticker symbol BOVH3.
 

 
BM&FBOVESPA S.A. – Securities, Commodities & Futures Exchange

On May 8, 2008, the activities of BM&F and BOVESPA Holding were integrated by the amalgamation of the two companies with Nova Bolsa S.A., which changed its name to BM&FBOVESPA S.A. – Bolsa de Valores, Mercadorias e Futuros. BM&FBOVESPA was born as one of the world’s largest exchanges by market capitalization.

In February 2010 the company signed a Memorandum of Understanding with CME Group whereby the two parties agreed to form a global preferential strategic partnership calling for:

  1. Equal and shared investment in and commercial agreements with other exchanges worldwide;
  2. Joint development of a new electronic platform for trading in derivatives, equities, fixed-income securities and any other products traded on exchanges and over the counter;
  3. An increase of BM&FBOVESPA’s equity interest in CME Group to 5.1%;
  4. Appointment by BM&FBOVESPA of a representative to sit on CME Group’s Board of Directors.

The definitive global preferential strategic partnership agreements with an initial term of 15 years were signed with CME Group on June 22, 2010.

In July 2010 BM&FBOVESPA increased its equity interest in CME Group from 1.8% to 5.1%, making it the largest single shareholder in CME Group.

In 2011 BM&FBOVESPA began upgrading its technological infrastructure to integrate its trading platforms and Clearinghouses, and began developing a new platform for over-the-counter trading.


 

Timeline

  • 1890

    Foundation of the Free Exchange (Bolsa Livre), which closes in 1891.

  • 1895

    Foundation of Bolsa de Fundos Públicos de São Paulo (the São Paulo Public Funds Exchange). Trades in government bonds and company shares are written up on big boards made of black stone.

  • 1967

    Emergence of brokerage houses and floor traders. The exchange is renamed Bolsa de Valores de São Paulo, or BOVESPA for short.

  • 1970

    Trading tickets replaced by perforated cards. All trades on BOVESPA are now electronically registered.

  • 1986

    Trading sessions begin on Bolsa Mercantil & de Futuros (BM&F), which opens its Derivatives Clearinghouse.

  • 1990

    Start-up of CATS, BOVESPA’s electronic trading system, alongside open outcry trading.

  • 1997

    BOVESPA implements Mega Bolsa, a highly advanced technological platform for information processing.

    Agreement between BM&F and Bolsa Brasileira de Futuros (BBF) to establish Mercosur’s main center for derivatives trading.

  • 1999

    Launch of the Home Broker online trading platform enabling individual investors to send orders directly to BOVESPA’s Mega Bolsa system and After Market (for after-hours electronic trading).

  • 2000

    BM&F implements GTS, its electronic derivatives trading platform.

  • 2002

    Start of operations of BM&F Foreign Exchange Clearinghouse and Bolsa Brasileira de Mercadorias. Acquisition of Rio de Janeiro Stock Exchange (BVRJ) membership certificates.

  • 2007

    Demutualization of BOVESPA, which is renamed BOVESPA Holding S.A., and of BM&F, which is renamed BM&F S.A.

    BOVESPA Holding S.A and BM&F S.A. register as public companies and hold IPOs on the Novo Mercado listing segment on October 26 and November 30 respectively.

  • 2008

    Integration between BOVESPA Holding S.A. and BM&F S.A. to found BM&FBOVESPA S.A — Securities, Commodities & Futures Exchange.

    Stock in BM&FBOVESPA S.A. starts trading on Novo Mercado under the ticker symbol BVMF3.

  • 2010

    Start of global preferential strategic partnership with CME Group.

  • 2011

    BM&FBOVESPA PUMA Trading System, a multi-asset class trading platform, begins operating with derivatives and spot foreign exchange on the BM&F Segment. The equities module is scheduled for launch in second-half 2012.

    Presentation of the Close Out Risk Evaluation (CORE) multi-asset multimarket architecture for integrated risk management across all asset classes and contracts, guaranteeing greater efficiency in capital allocation for users of the exchange’s systems.

  • 2012

    Start of the cross listing of soybean mini contracts and mini S&P 500 Index futures contracts, denominated in U.S. dollars, and Ibovespa futures contracts in BM&FBOVESPA and CME Group, respectively.

    Beginning of the construction of its new Data Center, located in Santana de Parnaíba, which aims reorganize and rationalize its existing data centers, moving to a more efficient and reliable platform, with greater capacity.

    Presententation to the market about the development of the post-trade integration program (IPN), for the creation of a new integrated clearing house, which will consolidate the current four clearing activities (equities and corporate fixed income, derivatives, FX and securities).

  • 2013

    The Company completed the deployment of the equities module of its multi-asset electronic trading platform, PUMA Trading System, operating now in two of BM&FBOVESPA’s major markets, equities and derivatives (delivered in the second half of 2011).

    Announcement of the new methodology for the calculation of the Ibovespa with the goal to ensure that the index accurately represents the performance of the Brazilian equity capital markets, which alteration was divided into two stages in the first half of 2014.

  • 2014

    Conclusion of the construction of BM&FBOVESPA new Data Center, ensuring greater efficiency and robustness to the Exchange infrastructure.

    In 2014, BM&FBOVESPA registered the first transactions of Structured Notes ("COE"), Certificate of Deposit ("CDB") and Real Estate Credit Bills ("LCI") on iBalcão, the platform for the registration of OTC products.

    Derivatives module implementation of the new integrated clearing facility (Clearing BM&FBOVESPA).

 

Last updated on 2014-08-29T12:33:04